Insights

Association Health Plan Guidance


On Aug. 31, 2018, Insurance Commissioner Elias issued Bulletin 18-045-AB regarding the association health plan (AHP) rule. The bulletin provides guidance on the current NH law applying to AHP coverage and explains the department’s intention to convene a stakeholder group to develop legislation for consideration in early 2019. The goal of the group would be to update the current law with respect to AHP coverage and create clear standards that will enable NH employers to benefit from the availability of new coverage options, while minimizing negative impacts to other health insurance markets.

As background, on June 21, 2018, the DOL issued final regulations regarding association health plans (AHPs). Under the regulations, a group or association of employers may act as a single employer sponsor of an AHP under ERISA. The federal regulations attempted to encourage the creation of these associations but emphasized that the states retain their authority to regulate AHPs. This bulletin clarifies the coordination with NH law.

In NH, AHPs are currently subject to the same statutory and regulatory requirements as any other MEWA or group health insurance plan — all group policies or certificates must have the prior written approval of the commissioner, including association coverage. Regardless of the new flexibility offered by the DOL, fully insured AHP coverage under current NH law must be rated in accordance with small group rating rules, if issued to a small employer (generally defined as an employer with at least one and up to 50 employees, including owners and self-employed persons, during the previous calendar year). Both the fully insured and self-insured rules for MEWAs apply equally to out-of-state association coverage, to the extent it’s issued to an employer with a “brick and mortar” workplace in NH that employs one or more NH resident.

Self-funded MEWAs are permissible in NH. To qualify, they must be: 1) nonprofit; 2) established by a trade association, political subdivision, religious organization or professional association organized and maintained for at least one year for a purpose other than providing health insurance; 3) operated pursuant to a trust by a board of trustees; 4) not offered or advertised to the public generally; and 5) operated in accordance with sound actuarial principles.

NH employers interested in MEWAs (either fully insured or self-insured) should be mindful of the current NH law limitations. This bulletin clarifies these limits within existing legislation, but also indicates that the department will work to convene a working group in September and October of 2018 to discuss options for legislative changes in 2019 that may further increase the ability for small employers to have access to AHP coverage.

John Elias. “Bulletin INS NO. 18-045-AB.” 2018 Bulletins, www.nh.gov/insurance »